GM (a.k.a. Obama Administration) Cave on Old to New Product Liability. Ish.

Robert Farago
by Robert Farago

Facing mounting political pressure, GM’s new masters have agreed to allow new liability cases against products made by old (pre- and intra-bankruptcy) GM to proceed against New (post-pre-bankruptcy). According to the New York Times, the deal went down in federal bankruptcy court on Friday. “G.M. and the administration’s [hands-off] auto task force have been negotiating with more than a dozen state attorneys general who have objected to the company’s plan to sell its desirable assets to a new, government-financed entity. A hearing to approve the plan is scheduled for Tuesday in federal bankruptcy court in Manhattan.” So, that’s that then. The Ad Hoc Committee of Consumer Victims of GM and Chrysler can relax. Comcast can kick back. Rep. Andre Carson can chill. Or can they?

Again, this agreement applies to new cases against Old GM. The Wall Street Journal:

Car-accident victims with pending lawsuits and those who had won damages against GM before it filed for bankruptcy would still be unable to bring claims against the new GM,” reports. “They would remain with other unsecured creditors making claims against the ‘”old GM.” As GM’s old estate winds down, those victims are likely to recover little or nothing.

Bottom line: this settlement leaves some claimants out in the cold. And raises questions about the fairness of post-C11 Chrysler’s fast walk away from its product liability legacy.

The [The Ad Hoc Committee of Consumer Victims of GM and Chrysler] said new GM should take on claims from victims already hurt from defective GM vehicles. It also said Chrysler should take responsibility for future claims, as well as those with pending lawsuits and successful cases brought against Chrysler before it filed for bankruptcy.

The committee said Chrysler’s unwillingness to take on future claims as GM has represented “an unacceptable double standard.”

Meanwhile, this settlement opens the door for other politically-connected parties who feel aggrieved by old GM. Dealers’ choice?

Robert Farago
Robert Farago

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  • Tpandw Tpandw on Jun 28, 2009

    lw: Maybe they've already started. 'Your idea of Buick just went boom' (or something).

  • CarnotCycle CarnotCycle on Jun 29, 2009

    When this subject came up last week, I was thinking of an "asbestos 2.0" slush-fund that the "new" companies could fund but not be directly liable for. Sort of like VEBA-for-lawyers type of thing. But I guess that would've involved some press releases, so instead it's swept under the rug here. Either way I knew the trial-sharks were going to get theirs, Donkeys wouldn't have it any other way given that they are the trial-attorneys' bitches. That same dynamic will also cripple any health-care reform, because any REAL reform in that business involves reforming the malpractice-tort industrial complex. Not gonna happen with the Donks.

  • Varezhka The biggest underlying issue of Mitsubishi Motors was that for most of its history the commercial vehicles division was where all the profit was being made, subsidizing the passenger vehicle division losses. Just like Isuzu.And because it was a runt of a giant conglomerate who mainly operated B2G and B2B, it never got the attention it needed to really succeed. So when Daimler came in early 2000s and took away the money making Mitsubishi-Fuso commercial division, it was screwed.Right now it's living off of its legacy user base in SE Asia, while its new parent Nissan is sucking away at its remaining engineering expertise in EV and kei cars. I'd love to see the upcoming US market Delica, so crossing fingers they will last that long.
  • ToolGuy A deep-dive of the TTAC Podcast Archives gleans some valuable insight here.
  • Tassos I heard the same clueless, bigoted BULLSHEET about the Chinese brands, 40 years ago about the Japanese Brands, and more recently about the Koreans.If the Japanese and the Koreans have succeeded in the US market, at the expense of losers such as Fiat, Alfa, Peugeot, and the Domestics,there is ZERO DOUBT in my mind, that if the Chinese want to succeed here, THEY WILL. No matter what one or two bigots do about it.PS try to distinguish between the hard working CHINESE PEOPLE and their GOVERNMENT once in your miserable lives.
  • 28-Cars-Later I guess Santa showed up with bales of cash for Mitsu this past Christmas.
  • Lou_BC I was looking at an extended warranty for my truck. The F&I guy was trying to sell me on the idea by telling me how his wife's Cadillac had 2 infotainment failures costing $4,600 dollars each and how it was very common in all of their products. These idiots can't build a reliable vehicle and they want me to trust them with the vehicle "taking over" for me.